The potential of the Internet of Things (IOT) to make consumers’ lives more convenient is well-documented. One area in which it can deliver immediate benefits and significantly change how a household or company in Africa manages and keeps track of its energy use is smart metering.

Rather than rely on estimated energy use to calculate bills, or physically visit customers’ homes to take meter readings, a smart meter allows energy suppliers to have a real-time view of a household’s or business’ energy consumption – resulting in more accurate billing. Smart metering systems also open up opportunities for better management of the demand and supply of energy. Utilities can track energy which is stored and available for purchase for other players who are in demand. Today’s systems no longer rely on just fossil fuels, but also on renewable energy, that more and more parties produce and sell, when not using it for their own consumption.

Africa and the Middle East are now seen as the next frontier for the implementation of this technology. Africa, in particular, is experiencing massive population growth combined with growing economies in many countries. Electrification is obviously a key driver in this kind of development and, as with other technological implementations, Africa is in a position to adopt new technologies immediately because it has few legacies.

Figures from ABI Research support the view that Africa is beginning to leap onto the smart metering bandwagon. Figures show that smart meter shipments to the Africa/ Middle East region are predicted to grow at a compound annual growth rate of 36.6 percent between 2011 and 2022. Revenues of companies involved in smart metering are set to grow by an equivalent 35.4 percent over the same period.

The installed base of smart meters with cellular connections will grow by 29.1 percent (GSM/ GPRS) and 71.2 percent (WCDKA), but off a very low base. As with any connected device, there are security considerations with smart metering. And since energy grids are critical national infrastructure, robust protection is paramount.

A highly-motivated cyber target

National energy infrastructure is a prime target for cyberattacks, and the consequences can be devastating. Black outs across entire countries, access to personal data and even to nuclear power plants make the smart energy ecosystem very attractive to cyber actors. Smart meters and smart grids present many potential routes of attack for criminals, which must be protected. This is why governments around the world are responding with initiatives that mandate specific protection protocols for smart grid deployments. Non-compliance could prevent access to the marketplace or lead to costly fines.

Smart meters have a long product lifecycle

Smart meters are not just installed for a couple of years and then updated – the intention is for them to last as long as 10-15 years. This means that advanced security processes need to be in place to replace ageing keys and to enable remote credential management, along with strong encryption and authentication tools to ensure that only authorized parties can access the energy assets and their data.

Smart meters can also be very difficult to access. Deployments are very wide – spread out over an entire country or even further – while the devices themselves are put into walls, behind locked doors or in physically remote locations such as mines or offshore sites. These make regular maintenance visits difficult, time consuming and costly. For these reasons, the ability to remotely monitor smart meters appear as crucial, to continuously protect the ecosystem in the long-run.

A dynamic market

Lastly, the energy market changes quickly. New entrants join the market frequently, while others disappear. The smart meter ecosystem has thus to be configured so that only authorized organizations and applications have access to metering data, and that changes to access can be applied instantaneously, whenever needed. As smart meter manufacturers might not be IoT security experts, partnering with digital security specialist firms can avoid putting AMIs (Advanced Metering Infrastructures) at risk.

It’s clear that the smart meter market is set to grow significantly across Africa in the near term. There are several market drivers behind this, such as theft and revenue protection, rising urbanization rates, improved operations among others. With this rise, comes the need for governments to understand end-to-end security of the smart energy ecosystem and the dedicated solutions available that provide encrypted keys and hardened key storage into smart meters – right from the manufacturing steps, as well as throughout the lifecycle of the smart meters.

In June 2018, Bouake, the second largest city of Cote d’Ivoire, suffered its first-ever shutdown of domestic water supply. The country’s dammed lake, which supplies 70 percent of the city’s water supply, completely ran dry. According to many experts, this was yet-again another consequence of climate change.

As a result of the drought, the people of Cote d’Ivoire went through extraordinary hardships affecting everything in their daily life, from acquiring clean drinking water and cooking to basic hygiene. The story of Bouake is one of many currently unfolding in Africa, where climate change has consequences of a magnitude never-seen-before globally.

To battle climate change, keep up with their pace of development and ensure food security, some countries, like Nigeria, Uganda and Zimbabwe, have resorted to solar energy as a solution. A growing body of research from some of the world’s most renowned energy experts and researchers, has demonstrated in a crystal clear fashion that no other energy source, from hydro to wind, can provide power and have an impact as sustainably, reliably, and efficiently as solar.

Solarplaza decided to highlight this great life-changing potential by publishing “Africa Solar Impact Cases”, an extensive report focusing on a small number of impact cases across the three main areas of solar development in Africa: utility-scale, mini-grid/microgrid and off-grid. They are not all rosy success stories; challenges remain palpable. However, they are able to show that solar energy’s potential to positively impact lives for the long term is greater than ever

One of those cases is the Mashaba project, which is a small village in southern Zimbabwe that installed a 99 kW mini-grid to power 2 irrigation schemes, 2 business centers, 1 school and 1 clinic. Mpokiseng Moyo, a farmer and mother of three, has been able to harvest 15 tonnes of wheat with this new solar system, compared to barely one tonne before the mini-grid was installed. This way the devastating consequences of droughts - inherent to the region, but worsened by the effect of climate change - can be mitigated. “Before being connected to the solar grid, we irrigated our crops using diesel pumps and traveled as far as Gwanda (more than 100km away) to buy diesel for the pumps. The pumps broke down many times, affecting productivity. But with solar energy we are able to farm throughout the year without any hassles,” Moyo said.

If you would like to learn more about the challenges and solutions related to the development and financing of solar projects in Africa, consider attending Unlocking Solar Capital (“USC”) Africa, the African region’s largest and foremost conference on unlocking capital for new solar development. The 2-day conference is organized in partnership with the Global Off-grid and Lighting Association (GOGLA) and will be held in Kigali, Rwanda on the 7-8th of November, 2018. The event will be aimed at bringing together hundreds of solar stakeholders, such as representatives from solar developers, development banks, investment funds, EPCs, IPPs and others, and is wholly focused on unlocking capital for new solar project development in Africa. For more information on Unlocking Solar Capital Africa, please visit: https://Africa.UnlockingSolarCapital.com

Canadian Solar Inc. announced it established a joint venture with ET Energy, a global clean energy developer and operator. Together they will provide Engineering, Procurement and Construction services for two solar power projects totaling 132 MWp in South Africa for BioTherm Energy, an independent African power producer.Canadian Solar Inc., one of the world's largest solar power companies today announced it established a joint venture with ET Energy, a global clean energy developer and operator. Together they will provide Engineering, Procurement and Construction services for two solar power projects totaling 132 MWp in South Africa for BioTherm Energy, an independent African power producer.

The projects, Aggeneys (46 MWp) and Konkoonsies II (86 MWp), are located in northwest South Africa and cover an immense area of 387 hectares. They are Round IV projects of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The two solar power plants are expected to be grid-connected by the end of 2019 and early 2020, respectively. Over 400,000 Canadian Solar's 1500V high voltage modules, CS6U-P, will be installed on single-axis solar tracking systems, with a total of 34 central inverters for the two solar projects. Construction of the projects is expected to start in September 2018.

Dennis She, President and CEO of ET Energy, said, "In partnership with Canadian Solar, BioTherm Energy, and other market leaders in South Africa, we have met all the requirements of the REIPPPP. With our South African subsidiary founded in 2016, and years of experience in project operation and EPC management, ET Energy will offer professional EPC and O&M services to utility scale PV plants in Sub-Saharan Africa, including South Africa."Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, said, "These projects are the first large-scale applications of our products in Africa's high voltage market. We hope to set more benchmarks for the renewable energy market in South Africa with high-quality products, advanced PV technology, and global expertise."

As a signatory to the Paris Agreement of the United Nations Framework Convention on Climate Change, South Africa has long been a leader in the African renewable energy industry. In November 2016, the country released the latest draft of its Integrated Resource Plan, which outlines the country's electricity strategy to 2050. Under the plan, the country seeks to add 18 GW of PV plants over 2021-50. In recent years, the successful implementation of the REIPPPP has ensured that the South African renewable energy sector has adhered to this strategy.

Enel’s renewable arm Enel Green Power started construction of the 34 MW[1] solar PV facility, which is located in southern Zambia and, once completed, is expected to produce around 70 GWh per year, avoiding the annual emission of over 45,000 tons of CO2 into the atmosphere

Enel will be investing approximately 40 million US dollars in the construction of Ngonye, which will be partly funded through a financing agreement signed with Zambia’s Industrial Development Corporation

The project, which is expected to enter into operation in the first quarter of 2019, is supported by a 25-year power purchase agreement with Zambia’s state-owned utility ZESCO

Room2Run, the African Development Bank (www.AfDB.org) and partners’ innovative US $1 billion synthetic securitization of a portfolio of seasoned African Development Bank private sector loans, will serve as a model for other lenders, help reduce costs, and shorten execution time, finance experts told participants at a workshop on Saturday.

The landmark securitization instrument, a first for any multilateral development bank, has been described by investors as a “strong market fit.” The instrument offers other multilateral development banks and investors a roadmap for innovative financing and new ways to explore the release of much-needed capital to impact financing and catalyze private capital in developing markets.

"This is particulat, asrly importan it opens the door for significant scale in the future, both in Africa and in other continents where your institutions are present and financing development projects,” said Swazi Tshabalala, the Bank’s Vice President of Finance.

About 70 participants from the international finance community – investors, bankers and other financial institutions, attended the workshop entitled “A Look at Optimizing MDB Balance Sheets Through Securitization, “organized by the African Development Bank and the Mariner Investment Group, LLC (Mariner), a key investor in the deal. The participants heard presentations on the structure of the securitization, challenges and lessons learned, followed by a question and answer session.

The workshop took place on the sidelines of the International Monetary Fund and World Bank annual meetings and the 2018 Global Infrastructure Forum in the Indonesian island of Bali. The AfDB’s Chief Risk Officer Tim Turner said the meeting was convened in response to massive interest from sister development institutions following the announcement of Room2Run in September, 2018.

The Bank, the European Commission, Mariner Investment Group, LLC (Mariner), Africa50, and Mizuho International plc announced the pricing of Room2Run on 18 September in Ottawa, Canada - the first-ever portfolio synthetic securitization between a Multilateral Development Bank (MDB) and private sector investors, pioneering the use of securitization and credit risk transfer technology to a new and previously unexplored segment of the financial markets.

Tshabalala said Room2Run was timely in the light of new regulations in banking that would see more traditional commercial bank lenders scaling back some of their activities in the project finance and trade finance markets. “These regulations will make investments in regions such as Africa more expensive and capital intensive, and this is why we have to find new avenues to crowd-in non-traditional sources of funding, " Tshabalala said.

Describing Room2Run as the “crown jewel of our impact activity, Andrew Hohns, Lead Portfolio Manager of the IIFC Strategy, Mariner Investment Group, said that there is a common misconception about the performance of MDB’s loans as unattractive; but the risk perceptions were often unbalanced”, he said.

“These assets have performer pretty well,” Hohns, said, giving reasons for Mariner’s global involvement with impact financing – nearly US$14 billion of infrastructure assets covering 1,250 projects world-wide. Hohns said the investor’s decision to partner with the Bank rested on its strong track record. The Bank is by far the most positioned of institutions on the continent to offer this kind of securitization, he said and synthetic securitization deals such as Room2Run were a “strong market fit.”

“The level of interest in taking exposure to the assets within the MDB’s is high,” Hohns said.

Kay Parplies, Head of Unit Investment & Innovative Financing, European Commission, said Room2Run was “catalytic” and hoped its involvement would attract other private investors and rating agencies to refine their approaches to African assets. Parplies said our experience over two decades had shown many in the investor community that actual risks (in African investments) were often lower than the perceived risks.

Other presenters at the workshop included Juan-Carlos Martorell Co-Head of Structured Products Solutions, Mizuho International and Nicole Giles Director General, International Finance and Development, Finance Canada.

Room2Run Roadmap to be shared with MDB’s

Turner said the Bank would soon publish a detailed journey of the Room2Run initiative, including all the documentation involved in its set up, to encourage other MDB’s to consider adopting synthetic securitization models to free up capital and create new pathways for institutional investors to support development. The document would be a “technical manual” to help others lower the cost and shorten the time to develop similar transactions.

“There is no need for our development partners to redo what we did. This is a knowledge sharing session of learnings from the school of hard knocks,” Turner said.

By creating new pathways between those with savings and those needing capital for development projects, Room 2Run would generate excitement within investment spaces normally far removed from development financing.

“Imagine a pensioner in Toronto knowing that his retirement investments are financing a power plant that was giving electricity to a family in Yopougon (Cote d’Ivoire). It’s a win-win.”, Turner said.

Structured as an impact investment, Room2Run is designed to enable the African Development Bank to increase lending in support of its mission to spur sustainable economic development and social progress.

Synthetic securitization and other similar models are intended to bring together public and private capital to finance development.

“MDB’s need to look at more than the financial return,” Bank Director of Syndication & Co-Financing, African Development Olivier Weck said, adding that the Bank had itself invested time to educate its board about the deal. “We needed to demonstrate additionality and the development outcome,” Eweck said.

Room2Run, positions the Bank as an innovative leader in providing lending in pursuit of the global development agenda, which prioritizes its own High 5’s and the Sustainable Development Goals. Freed-up capital will be directed toward renewable energy projects in Sub-Saharan Africa, including projects in low income and fragile countries.

“The Bank is treating this (Room2Run) as a pilot project,” Hohns said. “Mariner is very much interested in doing more.”

EnergyWeek Morocco will take place from 14-15th November in Marrakech. The event is a platform for decision-makers in the energy sector to discuss the progress of regional power projects in North & West Africa

Two separate investment meetings will be hosted within this week - the 3rd annual Africa Renewable Energy Forum (http://www.Africa-Renewable-Energy-Forum.com) and 2nd annual Gas Options: North & West Africa (http://www.GasOptions-NWAfrica.com/) - to explore opportunities for gas and renewable energy project development.

The event is endorsed by the Ministries of Energy of Morocco, Burkina Faso, Ghana, Gabon, Liberia, Mali, Mauritania and Sierra Leone with the support of leading Moroccan organisations ONEE, ONHYM, MASEN and AMEE, as well as lead private sector companies BP, Cheniere, Fieldstone, Skypower, ENGIE, Wartsila, Acwa Power, Ibvogt and Larsen & Toubro.

The rise of renewables across Africa

Recent estimates from IRENA indicated US$32 billion is required each year from 2015 to 2030 to fully exploit Africa’s renewable energy potential. With many North & West African countries harbouring significant untapped natural resources, a vast potential exists for the continued development of an investment in renewable power projects. Ambitious goals have been set by governments to increase renewable energy generation, such as Morocco’s targets of achieving 52% clean energy from sources such as solar and wind by 2030, or Nigeria’s vision of renewables accounting for 10% total energy consumption by 2025.

Milestone projects are now driving forward this momentum, such as Morocco’s 580MW Noor Ouarzazate IV power station, scheduled to be fully commissioned by October 2018, or Senegal’s 29 MW Senergy 1 solar PV plant – currently the largest solar farm in West Africa.

The future of gas in Africa

With gas widely considered the most affordable and clean base-load energy source, new discoveries in the gas sector are stimulating sector growth and infrastructure development, paving the way for the emergence of new players such as Senegal and Mauritania. With African countries, both importing and exporting gas, the development of regional projects is set to benefit both gas producing and non-producing countries by supporting industrial and economic development.

Globeleq, a power sector leader in Africa, and an affiliate of Brookfield Asset Management have reached a definitive agreement whereby Globeleq acquires Brookfield’s interests in its South African renewable energy portfolio. The agreement is subject to various closing conditions and once fulfilled, will give Globeleq a majority shareholding in six renewable projects totaling 178 MWs, as well as ownership in Brookfield’s South African asset management company.Globeleq, a power sector leader in Africa, and an affiliate of Brookfield Asset Management have reached a definitive agreement whereby Globeleq acquires Brookfield’s interests in its South African renewable energy portfolio.

The agreement is subject to various closing conditions and once fulfilled, will give Globeleq a majority shareholding in six renewable projects totaling 178 MWs, as well as ownership in Brookfield’s South African asset management company.

Globeleq is a long term strategic investor in Africa. The addition of the Brookfield assets fully complements its existing power plants in South Africa where it owns, operates and manages 238 MW of solar and wind projects and sets the stage for Globeleq to continue to expand its renewable energy portfolio throughout the continent.

Paul Hanrahan, Globeleq’s CEO stated: “Our team is working hard to complete this very exciting transaction. The expertise of our South African team will be able to enhance these assets by driving operational improvements and improve the existing social and economic development programmes.”The assets include five solar assets: Aries (11MW), Boshoff (66MW); Konkoonsies (11 MW); Soutpan (31 MW), and Witkop (33 MW) and the Klipheuwel wind farm (27 MW). The six projects were part of rounds 1 and 2 of the South African Government’s renewable energy programme and reached commercial operations in 2014. All plants have a 20-year power purchase agreement with Eskom.